Saturday, 7 January 2012

Pyramid cases at peak of online fraud

The Federal Trade Commission has closed down an online pyramid scheme that had allegedly bilked investors of $6 million, one of many operations that the FTC claims is being run by companies using the Net as a home base for their scams.

The allegations against Fortuna Alliance constitute the 12th and the largest online fraud case to date, according to the federal agency. The FTC issued a temporary restraining order against Fortuna after city officials in Bellingham, Washington, reported suspicious activity on the company's Web site."What if you paid $250 a month which produced a minimum of $5,250 income each month for you, while you watched?" asked an offering on Fortuna's site. "Well that's exactly what would happen if you hired Fortuna Alliance as your personal Marketing Expert."No fewer than 17,000 people signed up, sending the online company between $250 and $1,750 each for a total of $6 million.

The FTC has sued the five officers who run the nine-year-old Fortuna for operating an investment program that the agency described as a classic pyramid scheme. Typically in such operations, a handful of people at the top of the "pyramid" make their money from unsuspecting investors at the bottom--who are often left with nothing but debt to show for their contributions.

Comment: consumers need to make themselves aware of such scams, despite all the positive things the Internet has to offer, there's no reason not to think that bad guys will be there. It's much harder to find perpetrators in cyberspace than in real space and even harder to track them across international borders.

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About Me

Hi, I am Zhao Yanli, a MBA student at MMU University in Malaysia. I created this Blog for my Cyberlaw assignment. As you can see I uploaded cases about cyber crime, and at the end of each one I added my own opinion.

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